Using TMPGEnc, I selected ES(Video+Audio) to create a separate mpeg file (.m2v) and a separate audio file (PCM Wave).

I load both files into Ulead DV workshop (Or any other program, VirtualDub (mp2) …) and the Audio and video are out of sync.

I tried the following.
Using the same imported avi, I this time selected System(Video+Audio) and created ONE mpeg file (not what I want) containing the Audio and Video streams, and they are perfectly in sync. This tells me that the original avi is good.

I also tried extracting the audio from the original avi using VirtualDub (In case the audio was the problem) and it still did not sync with ether versions of the Video(Not with the .m2v file and not with the .mpeg)

Many programs play the sound out of sync during preview (especially if the video is VBR) but will play it in sync after you create a DVD. Compile your project to a title set folder and open that folder with PowerDVD, or some other DVD player (ex., WinDVD). If that plays in sync, the DVD will be in sync.